Most Indians that are visible to Americans are university students, co-workers, or other hard-working geek types. This is a very select group of people: those who were good at school, loved standardized tests and were willing to work hard and travel a long distance from their families. (People claim this is the cream of Indian intelligence, which is too generous. There are many smart people who choose to stay in India, because they can't bear the thought of leaving friends, family, food behind.)
So when you come across one of these folks in the university or at work, it occurs to you how all Indians are so different from the average American. What's more, every Indian seems to be hard working and reasonably sharp. After meeting a few such people, you cannot help forming an opinion that, "All Indians are Smart". Bang! You may have generalized a bit too far!
Back home in India, I made similar generalizations myself. I had met some foreign students studying in India and I was amazed at how bright they all were. Of course, they knew the university coursework, but they also knew about art, music, cooking and wine. They knew more Indian history than I did! Had I seen enough of such exchange students, I would have concluded that Western students are brilliant at everything they do. Similarly, many of my father's Japanese colleagues seemed to be exceptionally interesting, hard-working and sharp. But if you think about it - these were men with a high levels of responsibility so a dull person would automatically be disqualified from the job.
Something similar happens when Indians watch TV, and conclude that all Americans look gorgeous. Big mistake! They haven't encountered the average American, with his excess baggage of fat.
This is just a Sampling Bias, which was my original title for this post. However, a technical term would scare off half the audience, so I selected a suitably sensational title.